Medicare Payments for Insulin Have Increased Dramatically, Report Finds

A recent Kaiser Family Foundation report highlights the dramatic increase in Medicare spending on insulin products from 2007 to 2017. When taking into account payments made by plans, beneficiaries, and the federal government, spending increased by 840% from $1.4 to $13.3 billion.

Although there are an increasing number of Part D enrollees and an increase in the percentage of enrollees who have diabetes—with one third (33%) of people with Medicare diagnosed with diabetes in 2016, up from 18% in 2000—these trends do not account for the steep growth in overall spending. Indeed, the study notes that the average total Medicare Part D spending per user on insulin products increased by 358% between 2007 and 2016 (from $862 to $3,949).

The report also finds that “the total number of Part D enrollees using any insulin therapy nearly doubled between 2007 and 2016, from 1.6 million enrollees to 3.1 million—a much smaller increase in percentage terms (86%) than the percent increase in total Part D spending on insulin over the 2007-2016 period (753%). The total number of insulin prescriptions covered by Part D also increased over these years (from 14.8 million in 2007 to 33.3 million in 2016), but the percentage increase (125%) was also substantially lower than the percent increase in total insulin spending.”

The report therefore concludes that “rising prices and the introduction of more costly insulin products over the years” have driven these spending increases. The report highlights the three companies—Eli Lilly, Novo Nordisk, and Sanofi—that manufacture most insulin products. It notes that there are no generic insulin products currently available, despite the fact that insulin was discovered in the 1920s and that its discoverers famously sold the patent to the University of Toronto for $1 in an effort to ensure access to this lifesaving drug.